Lawmakers propose extending redevelopment agencies to April 15

SACRAMENTO (AP) — California lawmakers introduced a bipartisan measure Friday to save community redevelopment agencies from immediate elimination, but it's not certain if they have backing from legislative leaders or Gov. Jerry Brown.

Sen. Alex Padilla, a Los Angeles Democrat, said he and other lawmakers want to extend the Feb. 1 deadline for closing some 400 redevelopment agencies throughout the state. He said an extension to April 15 is needed to give agencies time to figure out how to work with the state to continue existing economic development projects and establish a process for handing off assets and liabilities.

Lawmakers voted to eliminate the agencies in their budget package last summer as a way to funnel the property taxes they generate toward local services. The move was proposed by the governor and upheld last month by the state Supreme Court.

Padilla said in an interview Friday that the leaders of the Senate and Assembly remain noncommittal to his legislation and that he faces a "bigger hill to climb with the governor."

The Legislature authorized redevelopment agencies shortly after World War II as a way to restore blighted neighborhoods. They are largely controlled by cities and counties to promote construction projects and have been credited with revitalizing blighted districts such as the Gaslamp Quarter in San Diego, downtown San Jose and Yerba Buena Gardens in San Francisco.

Critics say some have become little more than slush funds for private developers. Redevelopment money in the past has been used to finance big box retailers, sports complexes and other projects that critics say run counter to the agencies' original mission.

The governor said Friday he was not inclined to support an extension but indicated he remains open to hearing proposals for financing community economic development and affordable housing.

Brown said in a time when the state is facing a $9.2 billion shortfall, property taxes generated by developments needed to be diverted from the agencies to local schools, law enforcement and other services, rather than having that money go straight to the redevelopment agencies to be used for future development projects.

"It's never easy, it's always difficult," he told reporters while touring a solar project in Elk Grove, just south of Sacramento. "We have to go for core services, and in recent years redevelopment went way off the track."

But cities and redevelopment proponents are anxious about shutting down abruptly. Padilla said there's concern about laying off staff, not to mention potential lawsuits over pending projects.

Many local officials also say their redevelopment agencies are their main vehicles for promoting construction projects and creating jobs.

Some lawmakers, under pressure from local officials in their districts, have expressed a desire to reach a compromise that would allow redevelopment agencies to continue operating but under a different structure. Padilla's bill, SB659, does not contain language addressing a long-term fix.

"It's a little bit of a delay, but not a whole lot of time, so that we don't compromise funding ... to the state, but give ourselves a little more breathing room to address these very specific and technical issues," Padilla said of the legislation he introduced.

Labor and business groups urged the swift passage of Padilla's bill, saying that breaking up the agencies without a clear process will lead to confusion, lawsuits and layoffs on current and planned projects. Under the budget passed last summer, an agency's assets and liabilities are supposed to be taken over by its host city or handed off to the state.

"Particularly in this economy, when one in 10 workers are unemployed, we need time to make sure the dissolution process is done correctly and everything possible is done to protect workers impacted by this decision," said Steve Koffroth of the American Federation of State, County and Municipal Employees District Council 36, which represents Los Angeles redevelopment agency employees.

Senate President Pro Tem Darrell Steinberg said he is not eager to extend the deadline unless the League of Cities, which filed the legal challenge against the state, demonstrates it is more willing to work with lawmakers to restructure the redevelopment program and end some abuses.

"The League of Cities, specifically, has up to now successfully led a two-decade campaign to point the finger at the state of California and to say, 'You stole our money,'" Steinberg, D-Sacramento, told reporters on Thursday. "It isn't their money, it isn't the state's money, it's the taxpayers' money."

He criticized the league for fighting legislative changes all the way to the state Supreme Court, only to see the court uphold the Legislature's right to end the program while disapproving lawmakers' previous attempt to salvage some of the projects.

Steinberg said his goal would be requiring cities to create more affordable housing, one of the goals of stated goals of redevelopment agencies. His SB654, which passed the Senate Transportation and Housing Committee this week, would let local governments spend $2 billion in remaining affordable housing redevelopment funds.